The New York Insurance Department’s (“NYID”) Office of General Counsel (“OGC”) recently issued an OGC Opinion (No. 09-06-08) representing the position of the NYID in respect of four distinct queries regarding the recent amendment to Insurance Law § 3420, which we have closely followed and written about in this blog. (See, e.g., here, here, here and here.) Each issue addressed by this Opinion will be discussed in a separate blog post. (See here, here and here for the other issues addressed in the OGC Opinion).
The first issue addressed by the OGC was whether the recent amendments to Insurance Law § 3420 (which require, among other things, an insurer to establish prejudice as a predicate to disclaiming coverage on late notice grounds) also apply to policies issued in New York but delivered in another state where the statute states that it applies to “any liability policy issued or delivered in this state.”
The third issue addressed by the OGC was whether the new prejudice requirement promulgated under Insurance Law § 3420 also apply to claims-made policies. The OGC answered this query in the affirmative, stating that Insurance Law § 3420 applies to occurrence as well as claims-made policies, but that the statute “recognizes the distinctive nature of claims-made policies and does not allow for duplicate claims under multiple policy periods, or a late claim under a prior policy period.” In that regard, the OGC noted that Insurance Law § 3420(a)(5) “provides that a claims-made policy may provide that the claim shall be made during the policy period governing the time during which the event occurred; the renewal of such policy; and any extended reporting period under such policy.” (Citing Circular Letter No. 26 (2008), which we previously discussed here.